Has anybody used a Master lease option for acquiring commercial multi-family apt. building with no money down?

Has anybody used a Master lease option agreement to acquire commercial multi-family apartment buildings with no money down? If so would this be the best market to use this technique?
In Buying Property - Asked by George M. - Oct 9, 2009
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Answer(s)

Terra B.
Broker/Agent
Santa Clarita, CA

Hi George. In a nutshell, it all comes down to you. How confident are you that you will be able to fill all of the space in the building you are intending to buy. As long as the numbers make sense, then the deal is a no-brainer. your attorney should have a master lease option form available for you. I am looking at a number of properties to do this with as well, so let me know how you do!! terra@terrabruns.com

Oct 9, 2009
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Tarik Al-Hadi H.
Lender/Mortgage Broker
Farmington Hills, MI

Hi George, a master lease is just fine to take physical possession of a property; it really works best when the owner has nothing to loose, such as a property in need of significant rehab and lease up...to take this a step further if the owner can see that at the end of the lease or some point in the near future you have an exit strategy in place to cash him out he is more willing to work with you. Since you will have no title to the property you really won't be able to "refinance" the property, however I work with a company who specializes in assisting small companies raise the much needed capital for this sort of venture - let me know if I can help. Tarik H.

Oct 13, 2009
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Troy J.
Developer
Baton Rouge, LA

Not sure what a Master Lease is but it sounds a lot like the Bond for Deed contract I have now on a multi-family. It dawned on me one day that a lease with an option to buy is all this type of contract really is. I've been in real estate a while but my first like this. It's been tough but I learned a lot. Would I do it again? Only now knowing what I've learned.

Oct 13, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

Well you wouldn't really be acquiring it. You might get an option to purchase built into the lease.
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Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)225-9894
gregory.garver@gmail.com

Oct 23, 2009
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Travis B.
Owner/Investor
Saskatoon, SK

I am currently doing this strategy. It was my first property and it was distressed. The Motel was going to get deflagged, I got in with only my first months lease payment. I have an option to purchase with a % of my lease building the down payment. I have had to quickly execute strategy to build the business, renovate, manage, and grow every department while cutting expenses. Location is key to have an upswing on your valuation, and find an opportunity to maximize occupancy. We went from 45-50% occupancy to over 90% by changing how we market, target our niche market and pick the renovations with highest ROI. My down payment has come from growing our monthly business, using the increased equity from the valuation, and bringing on one partner that will help buy the next one.

Oct 11, 2013
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Tony N.
Owner/Investor
Tampa, FL

yes

Mar 11, 2015
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